Europe is engaged in an intensive debate about digital sovereignty and technological dependencies. Yet one of the most powerful instruments is already on the table: public procurement. New figures show just how urgent this issue has become.
The lever is enormous – and largely unused
Public IT spending in Europe is probably already above €100 billion per year. Exact figures are difficult to determine – and that is already part of the problem.
What we do know is this: detailed figures are available for the German federal government’s spending on Microsoft services. Expenditure amounts to around €481 million per year, or roughly €913 per employee. If this per-capita figure is applied broadly to the number of public-sector employees in Europe, Microsoft services alone would account for more than €30 billion annually. That alone would already represent almost one third of the estimated annual public IT spending of more than €100 billion – and it illustrates the scale behind what may appear to be minor licensing decisions.
A recent investigation by Tagesspiegel Background asked all 16 German federal states about their Microsoft spending. Ten responded with figures. The result: since 2021, these ten states alone have spent more than €686.5 million on Microsoft products. While annual spending still stood at around €104 million in 2021, by 2025 it had already reached roughly €192 million. That represents growth of almost 84 percent in five years, or nearly 17 percent per year on average. This is not normal inflation or simply increased IT demand. It is an indication of how strongly licensing and contract models, product cycles and lock-in effects are driving the cost curve upward.
Two key points become clear here: public administrations are not merely users of technology. They are market makers. And they often do not fully understand how their own decisions create dependencies and long-term costs.
Rising costs are not inevitable
The federal states themselves cite several drivers behind the rising expenditure: more digital workplaces, growing IT security requirements, and changes in licensing and contract models. But the decisive factor is the underlying cost logic. When functionality, updates and security are increasingly tied to closed platforms, what was once a one-off purchase becomes a permanently rising operating expense – and room for negotiation shrinks.
The example of Schleswig-Holstein is particularly revealing. The state has been Germany’s open source pioneer for years, yet still had to procure additional Microsoft licenses. The reason: support for Windows 10 ended in 2025, while the migration to Linux will continue beyond 2028. A further €4 million has been budgeted for this in 2025. At the same time, the state shows that alternatives do work: according to Minister of Digitalization Dirk Schrödter, the broad migration to LibreOffice and Open-Xchange for the standard workplace reduced costs from €18 million to €3 million.
Open source does not mean that all costs disappear. Migration, operations, training and integration remain demanding tasks. But open source changes the cost logic: money flows more directly into expertise, operations, security and value creation.
Today, a large share of public digital spending is invested in closed, proprietary software and cloud stacks that are controlled outside the European ecosystem. This is not primarily a purely technical issue. It is a question of industrial policy. Public money helps determine where innovation takes place.
If procurement continues to default to proprietary systems, Europe loses twice over. First, the money does not go to European companies. Second, it reinforces existing dependencies. This makes it harder to compete, to switch systems and to innovate on the digital infrastructures we use every day.
Open Source First creates a level playing field
A binding Open Source First principle would change this logic. This is not about excluding non-European providers or buying “European at any cost.” Open Source First simply means that before a public authority procures a proprietary solution, it must seriously and transparently assess whether a qualified open source alternative exists. The result of that assessment must be documented – and, of course, it must be possible to challenge the decision if the process has not been carried out properly.
This creates a level playing field. European companies receive a fair opportunity to compete through implementation, support, security and integration. And it creates a market in which organizations build on open foundations instead of repeatedly starting from scratch.
Open source is not an ideological demand, but an economic factor. A study published by the European Commission shows that around €1 billion in investments by European companies in open source generated an economic impact of €65 to €95 billion. This demonstrates the potential of using public funds not only for the short-term procurement of digital tools.
Public procurement is already industrial policy
The real question is not whether public procurement has an industrial-policy effect. The question is: in which direction does it work? Does it strengthen closed dependencies or build European capabilities? Does it finance proprietary lock-ins or create open markets? Does it increase the switching costs of public administrations or strengthen long-term digital agency?
The Cloud and AI Development Act should address precisely this point: it should ensure that Europe’s enormous public purchasing power contributes to building our digital industrial base.
That is why we need a binding and auditable Open Source First rule in public procurement. Not as an end in itself, but as a prerequisite for a fair market, for digital sovereignty and for Europe’s long-term capacity to innovate.
